Toronto home prices soar by 6.2% — and they are forecast to keep rising

Toronto Star 10 Oct 2019 at 07:28

Business

Home prices in the Greater Toronto Area are continuing to surge due to greater consumer confidence and a recent decline in mortgage rates, according to a new report from Royal LePage.

Across the region, Pickering saw the greatest year-over-year price appreciation, rising 6.5 per cent to $737,276, putting it slightly ahead of a 6.2 per cent gain in the City of Toronto, where the aggregate median price grew to $926,419.

As a whole, the GTA saw prices rise by 3.7 per cent, year-over-year, to a median aggregate home price of $858,443, according to the third quarter report, released Thursday. Prices are forecast to continue growing to a median home price of $859,301 by the end of the year.

“People just need houses,” said Chris Slightham, president of Royal LePage Signature Realty. “The population has grown in the last 24 months significantly. People just need somewhere to live and people realize the sky hasn’t fallen on real estate.”

Condo town houses and apartments saw significant gains across the region with prices rising 9.6 per cent in Mississauga and 9.2 per cent in Toronto. Scarborough, Brampton and Whitby also saw condo prices increase 7 per cent, 6.7 per cent and 6.1 per cent, respectively.

The report attributes Pickering’s price gains to a new casino that is slated to begin opening next year and the number of students attending nearby campuses of the University of Ontario Institute of Technology, Trent University and Durham College.

But Slightham says Pickering’s price point and geography also work in its favour.

“The 416 has gotten quite expensive, it’s an accessible community from a price standpoint and from a distance standpoint if you have to commute,” he said.

Whitby also saw a 1.2 per cent price increase in the third quarter to $678,968. But Ajax and Oshawa were among four 905-area communities where home prices declined — 1.3 per cent to $656,470 in Ajax and 0.3 per cent to $529,300 in Oshawa.

The largest GTA price drop — a 3.3 per cent decline in Richmond Hill — brought the aggregate median cost of a home in that city to about $1.08 million in the third quarter. Markham prices also fell 1.3 per cent year-over-year during the same period to $962,040, on average.

Slightham says those areas of York Region saw a lot of foreign buyer and speculative activity with rapid price escalation in 2016 and early 2017 before the previous Ontario Liberal government introduced its Fair Housing Plan, including a foreign buyers tax.

“When there’s been higher swings or higher peaks, you get lower and longer valleys. That’s why it’s taking a little longer for that area to recover,” he said, adding that the worst has passed.

“Inventory has dropped in the last 12 months significantly. It is starting to recover and I’d say we’ve seen the bottom of the pricing,” he said.

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